The Latte Factor, coined by Bach, is a phrase for all of those little habits that may be costing you big money over the course of your life.
The truth is the little amounts of $2, $5, or $10 you spend every day can add up to something huge, especially when considering compound interest.
If you’re looking for ways you can save with your own latte factor here are some habits that may be making your broke.
Cigarettes
Where I live (southern Ohio) a pack of cigarettes is right around $6. At a pack a day a smoker can spend around $180 a month or $2,160 per year. Over the span of twenty years that add ups to $43,200! That doesn’t take into account the fact that cigarette prices will rise or compound interest had you invested that money.
Take-Out Coffee
If you get coffee from a place like Starbucks you could spend upwards of $3 a cup, sometimes more. That comes out to $90 a month or $1,080 a year. If you’re currently living paycheck to paycheck that is a significant amount of money.
Scratch Off Lottery Tickets
My grandma loved scratch off lottery tickets. In fact, that’s what the entire family got her for Christmas every year. But that dollar here dollar there habit can add up quickly.
In fact any type of lottery habit is a waste of money. (Even if it is fun!)
Eating Out
This has been my latte factor in the past. Every time I get too busy I naturally want to turn to drive thrus for supper.
This is not only unhealthy but it can be a HUGE money drain. In fact, I’d say eating out is a bigger waste of money than any other habit. It’s just so much cheaper to make your food at home.
What if You Saved and Invested Your Latte Factor?
The thing about these habits is that even if you quit it’s easy to shuffle that money to some other unimportant goal. But what if you could see how much money you could accumulate if you did invest that money? Would that make a difference?
You can use the latte factor calculator (found here) to help determine what your habits are costing you. You might be surprised how wealthy you can become by making these small changes.
If you’re interested in learning more about the Latte Factor be sure to check out The Automatic Millionaire: A Powerful One-Step Plan to Live and Finish Rich
What’s your latte factor?